The FTSE 100‘s roared past 10,000 for the first time this year, amd gained almost 22% in 2025. In fact, it was its best year since 2009. The rapid growth may leave some UK investors wondering if they’ve missed the boat. Spoiler: they haven’t.
Last year’s rally was powered by three standout sectors: mining, aerospace and finance. Together, they drove over 70% of the index’s gains – and they don’t appear to be slowing any time soon.
Let’s take a look at the mechanisms behind the rally, and why they signal opportunity for investors aiming to bolster their portfolio in 2026.
Soaring sectors
Precious metals have surged 190% on China demand in 2025, inflation hedges and renewable energy’s insatiable appetite for copper and lithium. Almost all mining stocks delivered stellar returns and this year could see the world’s biggest miner emerge with unstoppable copper dominance (more of that later).
Aerospace and defence giants Rolls-Royce, Babcock and BAE all surged on soaring NATO spending amid Ukraine and Middle East tensions. Order books stretch years ahead – predictable, sticky earnings perfect for retirement stability. Investing in defence comes with ethical concerns, depending on the individual, but the sector’s performance can’t be overlooked.
And finally, finance. Thanks to elevated net interest margins and no Autumn Budget windfall tax, banks had a great year. Lloyds, Barclays, HSBC and Standard Chartered all benefitted, gaining between 50% and 80%. Plus, with yields between 4%-6% and rising, they’re a dividend dream. But here’s the catch: if the Bank of England cuts rates further, those margins will come under pressure. They look good for now, but it’s worth keeping an eye on.
Mining: the sector to watch in 2026?
Glencore and Rio Tinto (LSE: RIO) – two mining titans – have just restarted merger talks that could create the world’s biggest mining group. Rio’s reportedly preparing an all-share bid worth around £260bn, and Glencore shares jumped 10% on the news alone.
Both stocks have been stellar performers, with Glencore achieving strong trading profits with copper exposure and Rio leading on iron ore. A merged entity would dominate copper supply, a critical component in electric vehicles and renewable energy implementations. Plus, each company yields between 3% and 5%, making them attractive for both growth and income.
But the deal still faces regulatory hurdles such as antitrust concerns. If it clears, the combined company’s scale and cost savings could drive earnings upgrades for years. If it fails, both stocks could nosedive sharply. Either way, it’s a story worth monitoring in 2026.
The bigger picture
Not long ago, the ‘boring’ FTSE 100 was full of companies eyeing a US listing. Now, it’s quietly printing money through exposure to commodities, defence budgets and financial repricing.
As we head into 2026, it’s becoming an increasingly exciting growth story — with Glencore and Rio Tinto leading the charge.
Valuation-wise, Rio looks like the more compelling option, with a forward price-to-earnings (P/E) ratio of only 12.5. It also boasts a higher yield than Glencore, has twice the market-cap and almost half the debt.
While the upcoming merger threatens volatility, the potential for growth outweighs the risk, in my opinion. For me, that makes Rio a top stock to consider this month — and one I’ll be watching with an eagle eye.
